Ethena (ENA) continues to trade under pressure after its USDe stablecoin temporarily lost its peg last week, triggering a wave of liquidations and renewed investor caution.
💥 ENA Price Struggles Despite Partial Recovery
At the time of writing, Ethena (ENA) was trading near $0.3670, up 156% from its weekend low but still down roughly 60% from its September highs. The token’s recovery comes after one of its steepest weekly declines, as the broader crypto market suffered a widespread sell-off.
The sharp drop followed a $226 million liquidation event on Friday, when leveraged positions were wiped out amid a broader market crash. Many exchanges temporarily shut down leveraged trades as volatility surged.
Despite the chaos, whale investors appear to have used the opportunity to accumulate.
According to Nansen, large holders increased their ENA balances from 39.19 million to 45.2 million tokens over the weekend. Similarly, the top 100 addresses boosted their collective holdings to 13.76 billion ENA, up from 13.67 billion earlier this month signaling quiet confidence among major players.
🪙 USDe Remains Overcollateralized, Says Ethena Team
The panic surrounding Ethena stemmed from USDe, the project’s native stablecoin, which briefly lost its $1 peg during the market turmoil.
To reassure users, Ethena Labs published a proof-of-reserves report confirming that USDe remained fully backed and overcollateralized.
“Proof of Reserves are typically provided weekly by third-party attestors like Chaos Labs, Chainlink, Llama Risk, and Harris & Trotter,” the team said in a post on X (formerly Twitter).
“In response to community requests, we have released an additional off-cycle proof confirming USDe’s overcollateralization.”
According to data shared by Ethena Labs, USDe holds over $12.5 billion in assets, backed by major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and liquid stablecoins. These reserves are custodied by major exchanges including Binance, Bybit, OKX, and Deribit.
The latest audit showed the stablecoin was overcollateralized by approximately $66 million, providing additional assurance to investors after the brief depeg.
⚠️ Echoes of Terra Still Linger
While Ethena’s prompt communication and transparency helped calm markets, investor sentiment remains cautious. Many still recall the collapse of Terra’s algorithmic stablecoin (UST) in 2022, which erased over $40 billion in value and shook faith in the stablecoin sector.
Ethena, however, has emphasized its different risk model, relying on fully collateralized assets and verifiable third-party attestations rather than algorithmic mechanisms.
📉 Technical Analysis: More Downside Possible
On the daily chart, ENA remains technically weak despite its partial rebound. The token recently completed a double-top pattern at $0.8538, with a neckline near $0.6060 a formation often viewed as a bearish reversal signal.
After breaking below both the 50-day and 200-day exponential moving averages, ENA briefly fell under its year-to-date low of $0.2221 before stabilizing.
Analysts warn that the outlook remains bearish, with a potential retest of $0.2221 in the near term. Alternatively, ENA could experience a “dead cat bounce” a short-lived recovery followed by renewed selling pressure.
💡 The Bottom Line
Ethena’s swift response to the USDe depeg and its proof-of-reserves disclosure helped restore some investor confidence. However, technical weakness and lingering market fear suggest ENA may remain volatile in the short term.
As long as USDe maintains its overcollateralization and whale accumulation continues, Ethena could eventually recover but the path forward will likely be choppy.
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